Massive rice scam: Black marketeers siphon off 4,300 tonne of ration stock in Kerala

Thiruvananthapuram: As much as 4,300 tonne of rice, meant for distribution to the public through ration shops across the state, has been misappropriated by black marketeers over the past four years. Of the rice stock diverted for black marketing from various godowns, officials have recovered 75 tonne, while another 130 tonne that had already entered the black market have also been traced and seized.

These shocking figures, compiled from investigation reports of the Supplyco and Civil Supplies Department, were unearthed by Manorama through documents obtained under the Right to Information Act (RTI).

This whopping shortage in rice stocks was discovered during inspections conducted between June 2021 and August 2025 by District Supply Officers, the Civil Supplies Department’s Special Squad, and Supplyco Vigilance at Supplyco godowns functioning under the National Food Security Act (NFSA). The raids also exposed instances in which a section of officials colluded with black marketeers by deliberately failing to record the fresh stocks on the day they were received.

The premium-grade rice smuggled out of these godowns was sold to black marketeers at prices ranging from ₹18 to ₹24 per kg, fetching several lakhs of rupees in illegal profit for certain contractors and officials. The misappropriated rice was then sent to rice mills, polished and mixed with premium varieties, and brought back to the open market as branded rice. This rice is then sold at around ₹45 per kg.

These irregularities continue in stark contrast to the government’s repeated claims that loopholes in the Public Distribution System (PDS) have been fully plugged.

Fraud through misuse of weight-loss allowance
Rice stocks supplied to NFSA godowns from Food Corporation of India (FCI) warehouses are often diverted under the guise of ‘doorstep distribution’ through ration shops. Each FCI consignment to Supplyco typically contains 205 sacks of rice, of which five are set aside to account for natural weight loss in sacks during handling and transport.

However, these five sacks, along with two to four kg of rice leaked from the remaining sacks, are siphoned off. 

The miscreants exploit duplicate copies of billing documents in which the total weight of rice is recorded to cover up these diversions, thereby allowing smuggling to continue under the pretence of legitimate distribution.